Seniors Housing Business

APR 2018

Seniors Housing Business is the magazine that helps you navigate the evolution of the seniors housing industry.

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Page 31 of 48 31 April 2018 n Seniors Housing Business Advocate. Adviser. Ally. As a full-service capital provider and servicer, NorthMarq remains an integral part of your loan from beginning to end. We combine more than 50 years of experience with our deep knowledge of all aspects of your transaction to see you through the things you see coming... and the things you can't. C O M M E R C I A L R E A L E S T A T E D E B T , E Q U I T Y & S E R V I C I N G To speak to your local expert, visit Refinance options? Defeasance? Partner buyout? Loan maturity? Supplementals? Disposition? Reserve draws? Prepayment? Ownership change? Lease approval? Property damage? Billing questions? We're here to help. perfect," says Anderson. "But I don't see a ton of that because the banks have been a great governor of new supply." The require- ments of a developer to receive a loan include a strong operating part- ner with a finan- cial stake in the d e v e l o p m e n t , good credit by the borrow- ers and a mar- ket that's not already over- supplied, says Anderson. She points out that with a big wave of Baby Boomers starting to hit retirement age, what appears to be oversup- ply now could prove to be inad- equate in the near future. Short- term pain could equal long-term gain. "We're not worried about over- supply," says Anderson. "With the demographics going the way they are, we'll be undersupplied at the rate construction is happening." But oversupply concerns still resonate with both KeyBank and Walker & Dunlop, which both say they're watching seniors housing construction levels with a keen eye. "Fundamentals are good in gen- eral, but there is some concern with oversupply in certain markets as new entrants migrate into the seniors housing space," says Bill Jackson, senior vice president with Walker & Dunlop. "The seniors housing industry is certainly on the map as an attractive investment and growth asset class, so naturally we are going to experience excess supply in certain markets." All the lenders interviewed for this story indicated that Fannie Mae and Freddie Mac do an excel- lent job making sure that they're only involved in stable, well- underwritten deals. "[The GSEs] understand the seniors housing market better than anyone out there," says Ander- son. "They really are thoughtful and creative in their structuring. While they are constrained to their underwriting guidelines, they understand real estate and they understand good operators." That strict underwriting leads to success. Freddie Mac, for example, had zero delinquent seniors hous- ing loans in 2017. KeyBank's Nazdin praised Fan- nie's and Freddie's flexibility when it comes to vetting potential loans. The GSEs offer "outside- the-box" thinking that is rare with standard lenders. "Fannie and Freddie are apt to look at most transactions today on a case-by-case basis," says Naz- din. "While they have guidelines, they understand that every deal is different. In that spirit, they are willing to work with us to win the deal and get the deal done." Both Anderson and Nazdin note that the GSEs are also easy to get on the phone to discuss a potential deal. For their own part, both Fannie Mae and Freddie Mac say that they expect to continue to lend heavily in the seniors housing sector. "Fannie Mae was one of the early entrants into seniors hous- ing many years ago. We've found it to be a core market," says Klein. "We're about to have our 30th anniversary, and seniors housing has been a great part of that busi- ness for us." n Jeff Ringwald Walker & Dunlop Steven Schmidt Freddie Mac

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